posted on July 29, 2001 06:46:50 PM
I received an e-mail today from someone on eBay who apparently sells the same items on eBay as myself. Basically, I can mostly one item right now, all of them are identical. They usually sell for the minimum bid (around $10 each). A competitor e-mailed me and said that he/she would be careful starting these items at $1 NR (I've been trying that). This person states that I am driving the price down on these items. I guess this person was able to sell them for higher last year, but now that a lot of other sellers are selling them for lower prices, the demand has went down.
I would like to e-mail this person with my reasoning and explain to them that the lower prices aren't due to my $1 NR strategy, but due to over supply on eBay. I don't think I will even reply to them, however, because I think it will just cause more problems. They may turn me in for something that I didn't do.
Any thoughts? Have any of your competitors ever e-mailed you?
posted on July 29, 2001 06:59:30 PM
Fess up, WeRule, your diabolical plan is to drive the prices down to the point where your competitors are ripe for a hostile takeover or you can purchase their inventory at firesale prices. Just like the big boys play!
Gerald
"Oh but it's so hard to live by the rules/I never could and still never do."
posted on July 29, 2001 07:14:42 PM
Fact is when you under Price your market it makes your goods avalable at to low a price and everyone gets one now there are far less buyrers for your item in order to continue selling you have to set your price lower to keep selling.
see if one computer company started makeing complete system avalable at walmart and Kmart for $99 every home would have three or four soon to keep selling they would have to set there price lower to incourage the few who had need for a few more computers.
there is two ways to saturate the market for Items Ebay as a venue is one way to many sellers selling the same Items.
the other way is if one business in a market to sets the going rate so low that its hard to find anyone who needs what they are selling in a short time.
I can understand other in a category worried that other sellers are setting the price so low that soon it will drop the price so low there will be no profit or negitive profit in selling for everyone.
in retail you will find sales on items but from store to store priceing on same items vary ever so slightly from store to store.
you wont find the battery mart selling car batteries for $3 each to Just to draw all buyers for this item because soon the bottom would drop out of the market for this item even for them.
you Should be working with other in the ebay categories to be selling item at or close to the same starting bid, being competitive is good but when prices are set so low that sales out pace demand you create a category slow down an economic slow down for your items.
auctions are odd in the way they work buyers set the high market price if you are selling in a 50 of the same item at $1 starting bid and the going price is say $20 and there is only 25 interested buyers at this time you have under priced your market the new high price on this item will be 1or 2 dollars anyone else with a $9.99 start bid wont even get noticed your auctions killed the market.
Thanks for the lengthy explaination, very interesting, but what would you do?
I also might note that I tested one of these items last week at $1 NR, and it went up to almost $15, that's higher than I normally get. As I said, they sell for around $10 now (sometimes they don't get any bids at all with that price).
posted on July 29, 2001 07:51:53 PM
Well Some times Lengthy helps to drive a point home
as big as ebay is and as many registered users it has there is more for sale then there are buyer all the time.
In this community it would be best for sellers to keep listing set low and starting bids set competitvely but still at a fair market value.
high bids for these items was running from $10 to $12 average and with out $1 and .01 loss leaders.
this is one arguement for seller education and sellers knowing what they are selling doing research on past Auction and what there winning bids and starting bids were. why would you want to drive the starting bid on an Item that was selling very well with a $9.99 starting bid all down to $1 ????
I dont want to point no fingers at anyone on ebay but there is one seller on ebay that lists in just one category 400 to 500 items daily there starting bid on every item .01 .
I list item in this category 9 to 10 items at what I concider fair market price with a small profit for my starting bid.
the .01 starting bid will get 100% to 99% sell through my ten items will get 1% sell through same items many time same manufacturer.
How do I compete with Some one who sells this Item that should have a market value of 8 to 12 dollars if they are selling it with high bids from .01 to $3 .
by the time I purchase the inventory take pictures write decriptions pay to launch my auction listing fees FVF Credit card fees packing materals ISP charge and all its cost me more then $3 to run each auction !!!???!!!...
maybe this person does make a small profit after 50 or hundred sales but the rest of the sellers in the community dont have 500 item perday to list and sell they must make there profit with the first bid they cant set there starting bid at $0 or lower there are a lot of sellers and competition is good but you need fair competition there are 20,000 registered users and one is under priceing and locking other out of the category or market.
posted on July 29, 2001 07:52:39 PM
DMAN..I just hit your link and looked at your auctions and i see you sell records as i do..your lps are 4 and 5 dollars. Every lp you have listed on ebay i sell for a dollar or less. WHY? Because i have 1000s of lps like that i want to get rid of. They are easy to pick up..i sell lps like you have on 4 or 5 in a batch for 4 or 5 dollars.
what your saying is the fact that i should sell mine for 5.00 because thats what you have on yours. as you notice you don't have any bids..perhaps you're too high. there are tons of lps on ebay for a buck apeice and i just roll with the flow. i've had close to 1200 sales the last 9 months so i must be doing something right. NO one has ever emailed me telling me i am too cheap...gary
posted on July 29, 2001 10:32:26 PM
Hey Rule......
Email him back.....Tell him that you bought a truck load of them on a fire sale
to sell on eBay.....and that you were thinking of lowering them to a penny each
with free shipping.....and then the icing......tell him a penny will still make
you a profit......
or maybe not email him at all ...
.
That’s just my Capitalistic Troll Pig tendencies surfacing again...
posted on July 29, 2001 11:54:04 PM
Several years ago, when I first started, a few competitors contacted me about one thing or another.
One that sticks out is the guy who sold approximately the same product we did. He was basically warning me that we should price set the products and control our little "market" and if I didn't, then he could go as low as $2 or $3 per item (it sold for around $16 at the time) and basically put me out of the market.
Well, I knew better. First, we MADE the product we sold, he did not. I knew what the costs were exactly, and there was no way he could go lower than me. So, feeling devious, I lowered our prices by 50%. Needless to say about 40 days later, he was no longer selling the same product.
Something unprofessional sellers just don't realize, don't go threatening your competition and certainly don't try to manipulate them.
I set my prices for me. I have never received an email from a competitor if I had I would have ignored it.
I think it stinks that a person would have the gull to email you about this. I would never even think about doing this to a competitor. I think it is unethical and should be against eBay's policy.
Set the prices to suit yourself not someone else. In the long run with the new and improved eBay (it isn't what it used to be about 5 years ago) people are out for themselves. They would not consider you when they are setting their open bid price why should you? Who pays your bills? You do! Do you think your competitor will help you with your bills? No. So work for yourself not your competitor!
posted on July 30, 2001 01:08:21 AM
The $1 NR is a marketing trick that works in some categories and will ultimately backfire in all. I personally don't believe in selling anything on eBay for under $5 unless your last name is Claus or you consider yourself a charitable institution.
Although ridiculous low opening bids are like flypaper to clueless newbies, I look at them with disguest since they do a disservice to us all. It is also harming the growth of the alternative free auctions where such a strategy would be suicide, so everyone complains that the prices are too high there.
I price at an opening bid I would be happy with. And with well thought out ads written in a a style that does not suggest English as a foreign language or that my IQ is my shoe size, I can frequently compete with those dollar dodos.
As far as vinyl records the dollar dimwits effectively killed the market to the point that they are worthless. Sure you can make money if you sell them by the truckload. I routinely pass up about a hundred pounds of them a week. For free. Dumpster fodder.
Beanies Babies are next, and personally I'd be happy to see that garbage sprout. By all means make them a penny no reserve.
If you have excess stock that you want to dump, for chrissakes take it to a fleamarket, or Goodwill and don't pollute the market here as it will bite you in the butt just as much as the rest of us.
posted on July 30, 2001 03:16:59 AM
The $1/NR approach is a marketing strategy, nothing more and nothing less. I am not a "clueless newbie" but when my buying hat is on the possibility of obtaining an item for less than it might actually be worth is not something any intelligent person would bypass. In the majority of cases, the bidding brings it back up to a more reasonable price. In the meantime, the acitivty attracts more browsers who do gravitate towards items with bids (perhaps out of curiosity) and then might check out your other auctions as purchasing from the same seller and combining shipping is one of the most effective means of increase the value of our dollar on eBay.
Rather than "killing" the business, I think the healthy use of this strategy is critical to the success of eBay. Like the various lotteries, it is the dream of "hitting the big one" which keeps a lot of people coming back over and over again. And while they're waiting for the bargain of their dreams, they're looking and bidding.
I personally don't use the $1 opening bid unless that's all the item is really worth. I may not make any money on that particular transaction, but I've pleased a new customer who might check out my other auctions or who might come back at a later date. Who knows where our next regular customer is going to come from?
I also have enough confidence in the items I do sell, and my customer service, to not be threatened or alarmed by another seller offering a similar item starting out at $1/NR. Only one person can win that auction and the losers might very well find their way to my auction and bid more because they want to be sure and get it this time.
Now excuse me while I go dust off my extensive collection of LPs...if I got $1 apiece for each of them I would be plenty happy!
Gerald
"Oh but it's so hard to live by the rules/I never could and still never do."
posted on July 30, 2001 04:56:18 AM
i would check out the services provided by
shillshack.com.....they can make his life miserable and actually give him something other than your auctions to worry about.
posted on July 30, 2001 07:22:59 AM
I absolutely don't like $1 NR. It's a gimmick that can and does work, but it also really hampers both our image as sellers and the final price we get. If an item doesn't sell at $10 even though that's the going rate, it should get the ball rolling to mark it down a couple of dollars, perhaps with a Buy It Now price added. Oversupply has nothing to do with it. Marking prices down to the lowest amount stamps a clearance sale mentality on the auction.
Frankly I don't care for another seller emailing me, but there's nothing wrong with it and sometimes it can be very helpful.
posted on July 30, 2001 08:14:40 AM
I believe this is called competition. As far as I know that is one freedom we still have. If I was worried about a competitor I would do something to improve my listings. (e.g., better pictures, more payment options, change title,etc.). Do you think Mike Dell and Bill Gates aren't doing whatever they can to get the up and up on each other? You bet your bippy they are.
posted on July 31, 2001 02:05:59 PM
Are you making money with your low opening bid? If so keep doing what you are doing. If you can do it so can others. If as you say, there is too many like items on auction then sometimes you just have to get whatever you can & get out. Often sellers blame their problems on the competition rather than admit they bought too much inventory & stayed that field too long.
posted on July 31, 2001 02:37:15 PM
I don't think Dman said sellers should set their prices higher, just that saturating the market with lower bid items will drive the price down.
If your rival is complaining about your starting bid, you might point out that overall final values are higher. Maybe he should consider it too. Then again, if everyone jumped off the Golden Gate Bridge, would he do it? I don't know. You might also suggest that price-fixing is unethical.
Yes, I have chatted with competitors before. I remember one seller who copied a product of mine and designed her ad after mine. This was long ago, before VeRO or any current rules were in place. She just didn't know what I was talking about. She "had been thinking" about releasing a similar product when she saw my success. Why did her ad look just like mine? Umm ... well ... that's just the way some folks operate.
But eventually we signed a truce. One big issue was whose ad was at the top of the listings. I'd list an ad, and an hour later she'd put one up right above mine. We ended up flooding the category trying to get better placement. (This was back when buyers actually browsed the listings!) Eventually we agreed to list on separate days.
Another competitor of mine took offense at some statements I made in one of my descriptions. I don't remember what I said, probably something about buggy software and crash test dummies. Anyways, this guy wrote an exact clone of a program I was selling at eBay and released it as freeware. He linked to it in all his ads and promoted it. He did everything he could to kill my auctions, pretty much like the Microsoft browser wars. He swore up and down he'd drive me off eBay. I had to keep a fire extinguisher near my email box. (Boy, those were the good old days! I wonder whatever happened to what's-his-name?)
posted on July 31, 2001 08:47:22 PM
I think I would ignore the competitors E-Mail.I think each Seller has to use whatever way works for them to sell.I don't believe starting auctions for a penny or a dollar drives the price of an item down,what does that is whenever alot of sellers have the same item,the more there is of a item,the harder it is to get bids on it.Also the demand for the item determines how well it will sell.I sometimes sell new LP's,sometimes they bring way over what I thought they would,other times I can't sell them at all.I usually start them at $3.00 to $5.00 but never at $1.00 did that a few times and that was all they brought.
